RAK Cement reports loss, UAE

Ras Al Khaimah Company for White Cement & Construction Materials Company (RAK Cement) said it posted a loss of Dh81.8m in 2008.

The company had a loss of Dh81.8m, or Dh0.18 a share, compared with a profit of Dh160.5m, or Dh0.34 per share, a year earlier, the company said in a statement.

The firm’s revaluation loss of Dh117m on its investments in 2008 compared with a gain of Dh65.9m in the previous year.

Meanwhile, the company said its production levels continues to remain the same despite a slowdown in the construction industry in region.

A senior company official told Emirates Business the factory has been producing as per the current demand. The average daily production, he said, matches up to the company’s existing capacity.

RAK Cement’s installed capacity is 1.2 million tonnes of cement per year. "We have in no way stopped or reduced our clinker production. Our production levels varies and is based on demand and the amount we need to despatch. Our average daily production is 3,500 tonnes," said Vinayaka Murthy, Production Manager at RAK Cement.

The National Investor commenting on the company’s performance during the first quarter of last year had said in April 2008: "We expect RAK Cement to continue suffering due to the rising energy prices as there is no solution in sight. The management also shares this point of view and foresees dwindling margins in the immediate future.

"Higher realised cement prices did not offset the impact of rising energy costs. We expect margins to stay low in 2008 and have assumed that they will start improving in 2010."

According to analysts, several cement companies struggled last year due to rising energy costs.

Shortage of gas has also added to the burden and many companies are compelled to switch to diesel.